Cyprus Companies Law (Cap. 113) provides that each private company shall have a minumum of one director and each public company shall have a minimum of two company directors (s.170). In addition, every company should have an assistant along with a sole director shall ‘t be also secretary. However, within the situation of merely one-member private liability company the only director can as well be the company secretary (s.171).
Based on section 174 of Cap.113, the functions of the director or manager are valid notwithstanding any defect which might later on be found in theOrher appointment or qualification. Since company directors have forces to consider important decisions several responsibilities are enforced in it to ensure that to ensure the companies’ interests are very well-protected.
Responsibilities of Company directors:
a. Fiduciary Duty
b. Duty to workout skill and care
c. Statutory Responsibilities
It ought to be clarified that there’s no improvement in principle between executive, non-executive or nominee company directors. Are thinking about the responsibilities owed through the Company directors are owed towards the company and never to individual shareholders.
Based on the Law, a Director owes an obligation towards the company to do something in good belief within the needs from the company. This duty is called the ‘fiduciary duty’. Quite simply, the director is obliged to advertise the profitability from the company and safeguard company’s interest.
The main duty from the director would be to act within the needs from the company in general, and that’s usually come to denote the eye of shareholders both present and future.
Used, the fiduciary duty could be described the following:
1. Company directors shall act in good belief with what they say is the interests from the company.
2. Company directors must act in compliance with company’s metabolic rate, i.e. the memorandum of articles and association, and shall exercise their forces just for the needs permitted legally.
3. Company directors mustn’t use company property, information or chance for his or her own or anybody else’s interest, unless of course permitted to through the company’s metabolic rate or perhaps in particular cases when such use continues to be disclosed towards the company generally meeting and also the company has approved it.
4. Company directors shall not accept restrict their forces to workout a completely independent judgement. Nonetheless, when they look into good belief this it is incorporated in the interests from the company for any transaction to become joined into, they might restrict their forces to workout a completely independent judgement by saying yes to do something inside a precise method to achieve this.
5. In situation there’s a conflict between directors’ interests or responsibilities and also the interests from the company, then company directors are obliged to account towards the company for just about any benefit they receive in the transaction. Nevertheless, company directors aren’t obliged to take into account the advantage if they’re permitted to possess that interest by company’s metabolic rate, or even the interest continues to be disclosed and authorized by the company generally meeting.
6. Company directors must act fairly as between your people from the company.
7. Throughout a finding yourself of the company it seems that company directors still allow a company to incur credit while they understood or should have known the company didn’t have reasonable prospect of having to pay, then following a sections 307 and 312 of Cap.113, they might become personally responsible for that credit unless of course they are able to prove they have taken each step, to be able to minimise and/or get rid of the possible loss.